New Agency Worker Regulations pose no threat to IT

Organisations using IT contractors have ‘nothing to fear’ from new law

Employers of IT contractors have 'nothing to fear' about the new Agency Worker Regulations (AWR), according to an IT HR expert.

On 1 October, legislation giving contractors the entitlement to the same basic employment and working conditions as if they had been recruited directly by a company comes into force. To qualify for this entitlement, contractors have to have completed at least 12 weeks in the same job, and for workers already on assignment, the qualifying period begins tomorrow.

"In the IT world, these Agency Worker Regulations are being scanned quite keenly, and employers are doing the calculations to see if they are vulnerable to claims. All the large companies we talked with have found that with their IT agency workers, they have nothing to fear," said Iain Smith, director of IT HR consultancy Diaz Research.

An employment tribunal can award workers up to £5,000 if a business or agency is found to have flouted the rules.

Smith said that it was helpful that the AWR does not require a permanent employee's bonus to be included in the calculations.

"The agency worker's package is compared with the employee's package (ex-bonus) and on that count IT agency workers cannot claim to be underpaid.

"It might seem unnecessary for employers to check their practice here, as it's one of those accepted 'truths' that IT contractors get paid much more than IT employees. But the situation will vary between companies, so all companies must do the calculations - and not just those who have driven down their contractor rates in the last couple of years," he added.

The Public and Commercial Services (PCS) union was worried, however, that employers might try to circumvent the legislation by ensuring that contractors do not stay in the same roles for 12 weeks.

"Agency workers should only be used in limited circumstances for genuinely short-term cover [and] when they are used they should receive equal pay and conditions in return for the contribution their work brings to organisations," the union said, adding that it will be keeping a "close eye" on how the regulations work in practice.

But a spokesperson for the Department for Business, Innovation and Skills insisted: "Measures are in place to ensure that agencies and businesses don't purposefully try to get round the rules.

"If any worker feels that they are entitled to their week 12 rights, or a pattern develops where their work ends prior to this, then we would encourage them to speak to their agency in the first instance and then [arbitration service] Acas if the issues are not resolved."